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Nissan ousts chairman Carlos Ghosn following his arrest

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Posted at 7:13 AM, Nov 22, 2018
and last updated 2018-11-22 09:13:11-05

(CNN) — Nissan has removed its chairman, Carlos Ghosn, following his arrest earlier this week on suspicion of financial misconduct at the Japanese carmaker.

The vote by Nissan's board on Thursday ends Ghosn's reign at the top of the company dating back nearly two decades and could fracture a powerful alliance that he forged with Renault.

Ghosn was detained by Tokyo prosecutors on Monday following an internal investigation at Nissan (NSANY) that revealed "significant acts of misconduct" over many years, including understating his income in financial reports and misusing company assets. The Brazilian-born autos legend has not yet commented publicly on the allegations.

In a statement to the Tokyo stock exchange, Nissan said its directors, led by CEO Hiroto Saikawa, voted unanimously to remove Ghosn, and another director, Greg Kelly, from their posts.

Kelly has also been arrested by Tokyo prosecutors after being accused of wrongdoing by the company.

Nissan said it would set up a special committee to improve corporate oversight as well as find a replacement for Ghosn. Nissan did not immediately name an interim chairman.

French car maker Renault (RNSDF) earlier this week stopped short of removing Ghosn as its CEO and chairman as it waits for more details of the criminal investigation.

Mitsubishi Motors (MMTOF), the third member of the autos alliance Ghosn built, has asked its board of directors to "promptly remove" him as chairman.

Industry veteran

Ghosn is one of the auto industry's most high-profile executives.

Prosecutors allege Ghosn and Kelly collaborated to under-report Ghosn's income by about 5 billion yen ($44 million) over a five-year period ending in March 2015. The maximum punishment in Japan for filing a false financial statement is up to 10 years in prison and a fine of up to 10 million yen ($89,000).

Nissan's statement Thursday described Kelly as the "mastermind" of the scheme.

Japanese public broadcaster NHK reported Tuesday that Ghosn had also failed to properly disclose homes provided by Nissan in four countries. NHK said that prosecutors suspect Ghosn may have pocketed money that was meant for other executives at Nissan.

Japanese prosecutors have yet to formally indict Ghosn on any charges. He is being held at a detention center, where prisoners are typically fed basic rations of rice and miso soup.

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